Journal Articles

Payday lending in the UK: the regul(aris)ation of a necessary evil?

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Concern about the increasing use of payday lending led the UK's Financial Conduct
Authority to introduce landmark reforms in 2014/15. While these reforms have generally
been welcomed as a way of curbing ‘extortionate’ and ‘predatory’ lending, this paper
presents a more nuanced picture based on a theoretically-informed analysis of the growth
and nature of payday lending combined with original and rigorous qualitative interviews
with customers. We argue that payday lending has grown as a result of three major and
inter-related trends: growing income insecurity for people both in and out of work; cuts in
state welfare provision; and increasing financialisation. Recent reforms of payday lending
do nothing to tackle these root causes. Our research also makes a major contribution to
debates about the ‘everyday life’ of financialisation by focusing on the ‘lived experience’ of
borrowers. We show that, contrary to the rather simplistic picture presented by the media
and many campaigners, various aspects of payday lending are actually welcomed by
customers, given the situations they are in. Tighter regulation may therefore have negative
consequences for some. More generally, we argue that the regul(aris)ation of payday
lending reinforces the shift in the role of the state from provider/redistributor to regulator/enabler.

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Detail Information

Series Title

Journal of Social Policy

Call Number

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Publisher

Cambridge : Cambridge University Press., 2016

Collation

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Language

English

ISBN/ISSN

0047-2794

Classification

NONE

Content Type

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Media Type

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Carrier Type

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Edition

Volume 45 - Issue 3 - July 2016, pp. 527-543

Subject(s)

Regulation
payday lending
growing income

Specific Detail Info

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Statement of Responsibility

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